State and lo­cal pen­sion funds al­ready dis­play plenty of trans­parency

Austin American-Statesman - - VIEWPOINTS - Pat­ter­son is ex­ec­u­tive di­rec­tor of the Texas As­so­ci­a­tion of Pub­lic Em­ployee Re­tire­ment Sys­tems.

State

Comptroller Su­san Combs re­leased a report last week urg­ing greater trans­parency for state and lo­cal pen­sions, rec­om­mend­ing that they “report on a pub­lic web­site such line items as their ac­tual in­vest­ment re­turns for the past 10 years and the plans’ as­sumed rates of re­turn.”

As the rep­re­sen­ta­tive of more than 80 lo­cal pen­sions around the state, our re­ac­tion was, “Fair enough; it’s hard to ar­gue with trans­parency. We can do that.”

The trou­ble is that, the more we thought about it, all lo­cal pen­sions across the state al­ready op­er­ate in the fash­ion Combs sug­gests. They are pub­lic en­ti­ties, and they op­er­ate as such, with the in­for­ma­tion Combs re­quests be­ing read­ily avail­able. Let’s re­view the sta­tus quo.

First, each lo­cal pen­sion sub­mits quar­terly re­ports to the Texas Pen­sion Re­view Board, in­clud­ing such in­for­ma­tion as be­gin­ning and end­ing quar­terly mar­ket val­ues, num­bers of ac­tive mem­bers and re­tirees, num­bers of new and to­tal ben­e­fi­cia­ries, the to­tal of quar­terly con­tri­bu­tions by em­ploy­ees and em­ploy­ers, the quar­terly ben­e­fits paid out, and any plan changes made dur­ing the quar­ter. All of this in­for­ma­tion is avail­able to mem­bers of the pub­lic through the re­view board. It uses this and other in­for­ma­tion pro­vided by lo­cal pen­sions to cre­ate snap­shots of ac­crued li­a­bil­i­ties, val­ues of as­sets, funded ra­tios, amor­ti­za­tion pe­ri­ods and all other sorts of in­for­ma­tion, such as boards of direc­tors and de­tailed sys­tem in­for­ma­tion.

Sec­ond, all lo­cal pen­sion board meet­ings are posted per the Open Meet­ings Act re­quire­ments, and tax­pay­ers are wel­come to at­tend. Tax­pay­ers may re­quest to see and get copies of lo­cal fund records, ex­cept for the pri­vate records of in­di­vid­ual mem­bers and re­tirees, in­for­ma­tion that is pro­tected un­der the Texas Pub­lic In­for­ma­tion Act.

We’ve never heard of a sin­gle sit­u­a­tion where pen­sion fund trustees and staff have re­fused to an­swer or ad­dress the ques­tions and con­cerns of a sin­gle tax­payer, if they ask. In fact, at the last House Pen­sions, In­vest­ments & Fi­nan­cial Ser­vices Com­mit­tee hear­ing in Septem­ber, a num­ber of tax­pay­ers made it clear that they had been in con­tact with pen­sion boards and had gath­ered a great deal of in­for­ma­tion that they were con­cerned about and bring­ing to the at­ten­tion of the com­mit­tee.

Which brings us to a third point: Be­yond the above noted ac­cess to their lo­cal pen­sion sys­tems, tax­pay­ers are free to at­tend Pen­sion Re­view Board meet­ings and Se­nate and House com­mit­tee meet­ings deal­ing with pen­sions. Tax­pay­ers may talk to re­view board mem­bers and staffers and/or their elected of­fi­cials to get in­for­ma­tion. Tax­pay­ers’ lo­cal elected of­fi­cials are re­quired by law to re­view key plan doc­u­ments ev­ery five years. And the re­view board al­ready posts great quan­ti­ties of in­for­ma­tion on its web­site.

The Texas As­so­ci­a­tion of Pub­lic Em­ployee Re­tire­ment Sys­tems urges all of its mem­bers to pro­vide com­plete and proac­tive trans­parency of their sys­tems’ op­er­a­tions to their me­dia; lo­cal, state and elected of­fi­cials; and tax­pay­ers. In our view, there’s noth­ing to hide, and most funds’ per­for­mance is rou­tinely solid, en­abling cities to keep mu­nic­i­pal, fire and po­lice salaries low, but com­pet­i­tive, in ex­change for fu­ture re­tire­ment ben­e­fits. A study of Texas pen­sions found that 60 per­cent of those ben­e­fits come from in­vest­ment per­for­mance, with the re­main­der from the city and em­ployee con­tri­bu­tions. That’s a pretty good deal for tax­pay­ers, es­pe­cially con­sid­er­ing that more than 50 per­cent of Texas pub­lic em­ploy­ees don’t re­ceive any So­cial Se­cu­rity ben­e­fits.

At her press con­fer­ence, Combs sin­gled out the San An­to­nio Fire and Po­lice Pen­sion Fund web­site, and in­deed that web­site sets a good prece­dent for other sys­tems. It’s im­por­tant to ob­serve that web­site devel­op­ment and main­te­nance cre­ates ad­di­tional costs for lo­cal sys­tems, and they only pro­vide in­for­ma­tion that is al­ready avail­able to tax­pay­ers through the Pen­sion Re­view Board.

We at TEXPERS com­pli­ment the comptroller on her widerang­ing ef­forts to make sure all as­pects of lo­cal gov­er­nance are trans­par­ent and avail­able to tax­pay­ers. But we would re­ject any im­pli­ca­tion that this has not been the case for lo­cal pen­sions. Combs might be cre­at­ing more work for web de­vel­op­ers and more costs for tax­pay­ers by call­ing for the in­for­ma­tion to be more atyour-fin­gers, but that should not be un­der­stood to be a change from what is al­ready oc­cur­ring through the Pen­sion Re­view Board or the pen­sion it­self.

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